However, before the settlers go out and enjoy themselves, the windfall payment as announced by Prime Minister Najib, must be given proper scrutiny.

The settlers need to ask two critical questions:

1.Is the windfall amount of RM15,000 a fair offer?; and

2.Is the windfall payout conditional?

Only 30% - who pockets the rest?

As part of the IPO of FGVH, FELDA will be disposing 1.21 billion of its current FGVH shares at RM4.65 each. From this disposal FELDA stands to make a gain of RM5.62 billion. It is from the proceeds of the share sale that the government intends to make the RM15,000 windfall payout.

The claim by Najib that the windfall payment will come from “FELDA’s own strength” is somewhat stretching the truth; it doesn’t take a lot of strength to dispose shares. The total windfall payout to the 112,635 settlers amounts to RM1.69 billion. This proposed windfall payout represents a mere 30% of the RM5.62 billion share sale gain.

The primary asset in the IPO of FGVH is the 343,521 ha of lands owned by Felda Plantations, now leased to FGVH for 99 years. Felda Plantations is owned 100% by FELDA, the settlers do not have any shares in the company.

However, FELDA was set up for the primary purpose of helping and benefiting the settlers. Therefore whilst settlers do not have any legal right to the lands, they have a legitimate and moral entitlement to the benefits deriving from the lands. Now that these lands are leased to FGVH, the settlers are entitled to be compensated. The government acknowledges this, hence the windfall proposal.

RM50k and not RM15k, please

The government believes RM15,000 per household to be fair; we at PKR, beg to differ. We are of the view that after factoring

(a) the lease rental and profit share receivable by FELDA from the lease,

(b) the FELDA post IPO 40% equity in FGVH, and

(c) fair market value of the lands,

settlers should be compensated to the tune of RM50,000 each. Therefore, the settlers should be given the RM5.62 billion gained by FELDA from the share sale in totality.

By offering RM15,000, the government is short-changing the settlers. The touted windfall is therefore insincere and exploits the settlers’ lack of access to reliable IPO information and proper financial advisory.

Worse still, the payments are conditional

To rub salt into the wound, Najib’s proposal is to make three payments; meaning the payments are conditional. The question is conditional on what? Is it conditional on the outcome of GE13?

Perhaps we can gain some clue on this issue of conditionality by reminding ourselves on how Najib operates politically. Najib is infamous for being a firm practitioner of the dark political philosophy of “you help me, I help you”.

He claims to be a transformational leader but in truth he is the ultimate transactional leader. Unfortunately, in this matter of the settlers’ windfall, his transactional skills work to the detriment of the settlers.